School funding has never been an easy issue for New Jersey, not even for political colleagues like Sweeney and Prieto who can’t agree on how to administer it fairly

Assembly Speaker Vince Prieto (D-Hudson) testifies before the Assembly Education Committee in Trenton at the beginning of a hearing on the school-funding issue.

Gov. Chris Christie isn’t due to present a new state spending plan until next month, but with lawmakers now starting to look more closely at the issue of education funding, the budget debate in many ways is already well underway.

Two legislative hearings have already been held this week on the school-funding issue, and several more are scheduled to be held over the coming weeks.

The hearings come as Senate President Stephen Sweeney (D-Gloucester) and Assembly Speaker Vince Prieto (D-Hudson) have been working to get ahead of the school-funding issue amid fears that Christie, a second-term Republican now in his final year in office, could be looking to force drastic changes to the state’s school-aid formula through the annual budget process this year. Last year, Christie called for the state to begin providing aid using a uniform, per-pupil figure instead of the formula state aid has been based on since the current school-aid law was enacted in 2008. Christie’s proposal was roundly rejected by Democrats who control the Legislature.

But Sweeney and Prieto have themselves been unable to agree on how to make changes to the current school-aid formula, which the state has only been able to fully fund once, back when former Gov. Jon Corzine was in office. That’s left an annual gap in funding for local schools that measures between $1 billion and $1.5 billion.

Absent full funding of the formula — which no one expects in the short term given the state’s broad budget constraints — a key sticking point for lawmakers is what to do about special “adjustment aid” that has served to further distort the school-funding formula since it was enacted in 2008.

Despite the complicated political backdrop, lawmakers from both parties spoke yesterday during a lengthy Assembly Education Committee hearing about the need to work together on a bipartisan basis to resolve the funding issue in a fair manner. And no Republican on the panel made a pitch for Christie’s uniform, $6,599 per-pupil school-funding plan, which would hit urban communities with big cuts but help suburban school districts.

School funding has never been an easy issue in New Jersey, which pays for education primarily at the local level using a combination of funds raised through property taxes and money provided by the state out of the annual budget. This year, direct aid to local schools out of the state budget totals more than $9 billion, which is more than a quarter of overall spending. But property taxes are also at an all-time high in New Jersey, and in poorer communities there are simply not enough resources at the local level to keep pace with the spending that occurs in many of the state’s richer communities.

Over the last several decades the New Jersey Supreme Court has stepped in on several occasions to ensure that more state aid goes to poorer districts to make up for any funding gaps, basing its decisions on the state constitution’s guarantee of a “thorough and efficient” system of education in every community. The school-aid law enacted by Corzine in 2008 sought to end the court’s involvement by linking education funding to student need. It set an “adequacy budget” for each district based on factors such as special education, English-language learners and at-risk low-income students, and the court signed off on the formula in 2009.

But the state only had enough money to fully fund the formula in its first year thanks largely to the onset of the Great Recession. And though state revenue collections have improved in the wake of the recession, the growth has been slow. Meanwhile, Christie and lawmakers have also passed a slate of business-tax cuts while continuing to use the annual budget to underfund the school-aid law by at least $1 billion.

“So we need more money. That seems to be the answer,” said John Donahue, executive director of the New Jersey Association of School Business Officials, during yesterday’s hearing. “New Jersey is generally just desperate for some level of economic improvement.”

Also clouding the school-funding picture has been the way the state has provided adjustment aid to districts since the new formula was enacted in 2008. During the first year that the new formula went into effect, the adjustment aid was provided to prevent a steep drop-off in state aid as some districts were due to see big cuts. The districts were eventually supposed to be weaned off that aid, but that hasn’t happened.

Now, according to estimates presented by school superintendents during yesterday’s hearing, more than 200 districts are receiving more than 100 percent of their estimated state aid, while another 379 are receiving less than 100 percent. There are also disparities in how much school districts across the state are contributing toward their local “fair share.”

“The truth of the matter is the state can help local districts greatly by distributing aid to schools more equitably than it does now and providing the full SFRA funding,” said Ken Greene, superintendent of Newton Public Schools. “Again, we have a huge range in terms of the percentages that the districts are receiving in terms of their state aid.”

While some, like the New Jersey Education Association, the state’s largest teachers’ union, have advocated for basing school aid on the 2008 formula on a prorated basis if underfunding persists, Sweeney has put forward a plan that would see the adjustment aid reduced, but at the same time $100 million would be added on an annual basis over five years to the formula. Sweeney’s plan also allows some new aid for districts with increasing enrollment to make up for underfunding in districts with growing enrollment.

Sweeney is planning to chair an initial meeting of the Senate’s bipartisan Select Committee on School Funding Fairness on January 27 in Woolwich. “We have to look beyond the politics of school aid and do what’s right for education and the taxpayers and there are no good reasons for not doing it now,” he said in a statement released Monday as another committee delved into the same issue. “Further delays are the enemy of fairness and equity.”

But so far, Prieto is not onboard with Sweeney’s proposal, which could significantly cut funding for school districts in Prieto's home county of Hudson, including Jersey City. Instead, Prieto is taking a more wide-angle approach as the Assembly Education Committee plans to hold more hearings on the issue in the coming weeks. “We’re going to look at everything to make sure that ultimately we give a quality education as our constitution mandates, a thorough and efficient education, to every child in the state of New Jersey, no matter their zip code or their economic status,” Prieto said at the beginning of yesterday’s hearing.

Assemblyman David Wolfe (R-Ocean) also pledged to use fairness as a goal as the Assembly committee takes on the issue over the next several weeks. “I just hope for all of our sakes that we just come down to something we can all agree on,” said Wolfe, a veteran lawmaker who served on a bipartisan panel on education funding when the 2008 formula was crafted.

“I think it’s important that we’re having these (meetings) and I hope that for once and for all we can up with something that’s fair to everybody,” he said.